Pierre Dussauge

Learning from competing partners : Outcomes and durations of scale and link alliances in Europe, north America and Asia

This paper investigates the outcomes and durations of strategic alliances among competing firms, using alliance outcomes as indicators of learning by partner firms. We show that alliance outcomes vary systematically across link and scale alliances. Link alliances are interfirm partnerships to which partners contribute different capabilities, while scale alliances are partnerships to which partners contribute similar capabilities. We find that partners are more likely to reorganize or take over link alliances than scale alliances. By contrast, scale alliances are more likely to continue without material changes. The two types of alliances are equally likely to shut down, at similar ages. These results support the view that link alliances lead to greater levels of learning and capability acquisition between the partners than do scale alliances. Copyright

Alliances versus acquisitions: choosing the right option

Recently, a wave of corporate acquisitions has swept across Europe, prompted by liberalisation and unification in the European Union. The authors ask the question: Has this made the traditional preference by European firms for alliances and co-operative strategies obsolete? Bearing in mind that, in global terms, alliances are popular, another question is: Should European firms use their experiences in alliances to develop new alliance strategies as an alternative to joining the trend to acquisitions? After a review of the European model of alliances, the authors discuss the pros and cons and rationale for horizontal acquisitions and scale alliances, and argue in favour of more aggressive complementary alliances combined with mergers and acquisitions to expand in Europe as well as globally

Anticipating the Evolutions and Outcomes of Strategic Alliances between Rival Firms

Focuses on the strategic alliances set up by rival firms. Information on the evolution and outcomes of strategic alliances; Definition of strategic alliances

Value Creation in Alliance Portfolios: The Benefits and Costs of Network Resource Interdependencies

We draw on the resource-based view of the firm and the alliance benefits and costs literature to advance a model of value creation in firms that access network resources through multiple simultaneous strategic alliances with different partners. Our model suggests that value creation on the alliance portfolio level is a function of the benefits created through synergistic combinations of network resources accessed through alliances with different partners and of the costs generated by the substitutability of resource combinations between the focal firm and its alliance partners. We specify the conditions under which firms can leverage their network resources accessed from alliances with different partners to create benefits above and beyond the benefits they create at the level of any individual alliance. We conclude that the value creating potential of network resources should not only be evaluated on the basis of each individual alliance but also from an alliance portfolio perspective.

Alliances With Competitors: How to Combine and Protect Key Resources?

Our study addresses two main questions: First, what types of alliances do firms tend to create when combining different kinds of resources? Second, what governance mechanisms do firms set up to coordinate and protect resources when they use them for different alliances? We examine 227 alliances between competitors in Asia, North America, and Europe. We first identify two types of alliances: scale alliances in which the partner firms contribute similar resources, and link alliances in which the partners contribute complementary resources. We find that firms contributing R&D and production resources tend to form scale alliances, while firms contributing marketing resources tend to enter into link alliances. We also find that firms are more likely to choose stronger protection mechanisms for link alliances, which create greater appropriation risks, while they tend to seek higher levels of coordination in scale alliances.

Industrial alliances in aerospace and defence: An empirical study of strategic and organizational patterns

An empirical study of seventy inter-firm alliances in the aerospace and defence industries reveals the importance of organizational factors in the construction of a typology of such ventures. Three types of alliances are identified. The study also suggests a link between each type and patterns of evolution of the partnerships over time.

Patterns of strategic alliances between rival firms

This article describes the results of a research project which examined 171 alliances set up by competing firms in an international context. It presents an empirically-based taxonomy of such alliances constructed on the basis of a set of variables chosen for their demonstrated or assumed influence on the evolution and outcomes of strategic partnerships. Three contrasted types of allliances are identified: quasi-concentration alliances, market penetration alliances and shared supply alliances. They differ according to two fundamental dimensions: their symmetrical or dissymmetrical nature and the way in which they alter competition. Legal structure, often emphasized in previous research on the subject, does not emerge as a strongly discriminating factor. Hypotheses on the likely evolution and outcomes of each type of alliance are derived from the taxonomy.

French ‘savoir-faire’ in selling arms: A new way of doing business?

In this remarkable article the authors analyse the reasons for the success of the French arms industry. In particular they note the financial and technological support given by the French Government, the independent foreign policy which the government pursues and the technological innovation which French arms producers have consistently developed. They build a picture of close collaboration between the French Government and the arms industry and demonstrate how the French arms business has been able to create a virtual monopoly of certain market segments.

The conversion of military activities: a strategic management of the firm perspective

Studies on the conversion of military industrial activities up to now have largely ignored one of the main actors of the conversion process: the firm. Adopting a strategic management of the firm perspective, the purpose of this chapter is to give some insight on the way the conversion process will affect firms that have military activities. The first stage in the analysis is aimed at clearly identifying the main characteristics of defence-oriented activities, pointing out the specific part they play in a firm’s business portfolio, and understanding how they affect the formulation and implementation of a firm’s global strategy. Military industrial activities appear to have three main strategic impacts on firm’s business portfolio: (i) a technological impact; (ii) an impact in terms of financial resources and profitability; and (iii) an impact on the firm’s global risk level. Taking these points into account, one can suggest that the main impulse to proceed with a conversion process must necessarily be given by the State and that firms involved will generally oppose the process. A general framework for evaluating the effect on the firms of the conversion of their military activities is presented as a conclusion. It seems to imply that different firms face different problems and that they therefore require differentiated government measures; the central consideration for designing the government measures is the strategic impact of military activities on the business portfolio of the various firms.

Does Expanding through Alliances vs. Mergers and Acquisitions Matter? The Example of the Global Retail Industry

Though alliances and mergers and acquisitions (M&A) are both extensively used by companies seeking to achieve the benefits of greater size and scale, strategy research has rarely examined these two moves as alternative courses of action. Indeed, the size-performance relationship has long been a major research topic both in industrial organization and in strategy. In the late 1960s, it has given rise to such famous strategy concepts as the so-called “experience curve”, but has since generated only limited interest. More recently, much research has been devoted to examining mergers and acquisitions on the one hand, and inter-firm alliances on the other hand. Both these moves significantly affect a firms scale and are thus likely to have an impact on performance. However, the work on M&A or on alliances very rarely compares these different modes of growth to one another in their ability to deliver scale benefits. Our research specifically aims at analyzing the relative scale effects achieved when growing through either M&A or alliance, using organic growth as a baseline scenario. In this chapter we develop arguments on the relative impact of these two alternative modes of growth in terms of economies of scale, bargaining power, and overall performance effects. Our empirical analysis of the global retailing industry (through a sample of 82 firms observed between 1984 and early 2000s) reveals that M&A enhance bargaining power, while alliances fail to deliver the expected benefits.